Summary:
China’s fungicide industry is confronting export challenges due to escalating U.S. tariffs on pesticide formulations. However, the resilience of technical-grade fungicide exports remains robust. In response, Chinese companies are increasingly focusing on Southeast Asia and South America, investing in localized production capacities and technological upgrades. Innovations in premium formulations and technological advancements are supporting growth despite potential market risks and price fluctuations.
I. Export Dynamics: Volume Growth Amid Price Declines
Export Volume and Value for Fungicides and Other Pesticides
In 2024, China’s total pesticide exports reached 3.2 million metric tons, valued at USD 9 billion. Fungicides represented approximately 7.7% of the total export volume and 12% of the total export value. Specifically, in the first three quarters of 2024, China exported 174,000 metric tons of fungicides, valued at RMB 5.595 billion (approximately USD 800 million). This indicates the substantial market share fungicides hold within the broader pesticide export industry.
Export Price Trends for Fungicides and Other Pesticides
The average export price of fungicides in 2024 stood at approximately USD 4,548 per ton, reflecting a 13.6% year-on-year decrease. In comparison, other pesticide categories like herbicides and insecticides saw more substantial price declines:
- Herbicides were priced at around USD 3,160 per ton, showing a 10.5% drop.
- Insecticides were priced at USD 2,643 per ton, reflecting a 12.4% year-on-year decline.
This price fluctuation is a result of several global factors, including changes in production costs, competition, and the global supply chain disruptions.
II. U.S. Tariffs and Market Shifts: Export Pressures Intensify
Impact of U.S. Tariffs on Pesticide Formulations and Technical-Grade Products
The U.S. has imposed high tariffs, ranging from 79% to 145%, on Chinese pesticide formulations, severely curbing exports of these products. However, technical-grade fungicides such as glyphosate and glufosinate have remained largely untaxed, allowing these products to become “safe havens” for export. For example:
- Glyphosate saw a 45% price decline in 2024 compared to its peak in 2023, priced at approximately RMB 28,000 per ton (about USD 4,000).
- Glufosinate maintained strong export figures despite the tariff challenges.
Shifting Export Markets: Southeast Asia and South America
As exports to the U.S. account for less than 6% of total fungicide exports, Southeast Asia and South America have emerged as critical growth markets. In Q1 2025, fungicide exports to ASEAN countries surged by 22.1%, and the broader export to South America was up by 20%. These regions are becoming key destinations due to the high demand for agricultural products and the continued expansion of crop protection solutions.
III. Sales and Pricing: Demand for Technical Grades and Premium Formulations
Corporate Performance and Market Positioning
Leading companies in China’s pesticide industry, such as Yangnong Chemical and Sinochem Group, have reported diverging performance based on product pricing trends.
- Yangnong Chemical sold 99,900 metric tons of technical-grade fungicides in 2024, representing a 3.5% increase year-on-year. Despite this, the company saw a 13.07% drop in revenue, primarily due to the decline in product prices.
- Sinochem Group launched new brands such as “Huiyi” and “Fumanfeng” to cater to the premium market segment, focusing on disease control for high-value crops such as cotton and corn.
Pricing Trends in Technical-Grade Fungicides and Formulations
As of April 2025, pricing for technical-grade fungicides and formulations showed the following trends:
- Azoxystrobin (technical grade): Priced at RMB 140,000 per ton (USD 20,000), reflecting an increase driven by raw material cost pressures.
- Pyraclostrobin (technical grade): Priced at RMB 158,000 per ton (USD 22,500).
- Triazole products such as tebuconazole remained stable at RMB 51,500 per ton (USD 7,300).
Formulations such as nano-pesticides and sustained-release formulations (e.g., microcapsule suspensions) commanded a 30% premium, with gross margins exceeding 40%. This trend reflects a shift toward higher-value, technology-driven products within the fungicide and pesticide sector.
IV. Supply Chain Developments: Localization and Technological Upgrades
Key Technological Breakthroughs in Raw Material Production
Companies like Chongqing Ziguang Chemical have made significant strides in reducing production costs by localizing key intermediates. For instance:
- 4,6-dihydroxypyrimidine (DHP) and trimethyl orthoformate (TMOF), crucial intermediates for azoxystrobin, have been produced locally, leading to a 15% cost reduction compared to imported alternatives.
- Sinochem Lantian has also disrupted the market by producing electronic-grade hydrofluoric acid with 99.999% purity, enabling China to reduce dependency on imported semiconductor-grade materials.
These innovations in production are helping to reduce costs, improve efficiency, and enhance China’s competitiveness in the global pesticide market.
Capacity Expansion and Relocation: Strategic Moves by Leading Companies
As part of its strategic response to tariff pressures, Yangnong Chemical has accelerated its local production efforts. The company’s new facility in Liaoning, part of the Youchuang project, is focused on localizing the production of lambda-cyhalothrin and other key fungicides, helping avoid risks associated with the U.S. tariffs.
Similarly, Lier Chemical has completed the registration of glufosinate-p in eight ASEAN countries, aiming to capture 50% of the regional market share within three years. This move is designed to reduce dependency on markets in Europe and the U.S., aligning with broader regional demand.
V. Regulatory Risks and Policy Uncertainty
Tariff Volatility: Impact on Fungicide and Raw Material Costs
China’s 34% tariff on U.S. pesticides is expected to continue affecting the costs of high-end fungicide raw materials such as azoxystrobin intermediates. Additionally, potential future tariffs on technical-grade pesticides like pyrethroids could impact companies like Yangnong Chemical, with potential revenue reductions of up to 2.4%.
Technical Bottlenecks and Raw Material Shortages
Despite progress in localizing production, certain semiconductor-grade fluorinated materials (such as photoresist solvents) remain reliant on imports. This continues to present a technical challenge for full localization of fungicide and pesticide production.
Additionally, biological pesticides, which account for over 10% of the pesticide market, still face a reliance on imported raw materials, with the domestic substitution rate below 20%. These challenges underscore the need for further advancements in local manufacturing and raw material production.
VI. Future Trends: Technological Innovation and Market Growth
Market Diversification and Growth Opportunities
Regions like Southeast Asia, Africa, and the Middle East are expected to see significant growth in pesticide demand. ASEAN exports alone saw a 22.1% rise in Q1 2025, signaling strong market potential. In addition, Brazil and Argentina are becoming key drivers of growth, particularly as these countries expand their agricultural output and crop protection needs.
Technological Advancements and R&D Investment
The demand for biological pesticides is expected to grow, now representing over 10% of the market. Investment in technologies such as nano-pesticides and sustained-release formulations is projected to increase, accounting for 5.8% of total R&D spending. The biological pesticide market alone is expected to reach RMB 33 billion by 2027, driven by increased focus on environmentally friendly and innovative crop protection solutions.
